UGA MEACA PROJECT SHOP MARKETPLACE Note: Transition relief means that employer responsibility payments will not be collected for 2014

Today’s Overview 1. Affordable Care Act (ACT) and Businesses  Employers  Employees 2. Small Businesses  Self-Employed  <50 Employees  SHOP Marketplace 3. Large Businesses 4. Action Steps for Employers

ACA and Businesses

ACA Recap  On March 23, 2010, President Obama signed the Affordable Care Act into law, putting in place comprehensive reforms to:  improve access to affordable health coverage for everyone; and,  protect consumers from abusive insurance company practices (abbreviated).  Implementation of the Affordable Care Act occurs in stages, with many of the reforms and requirements taking effect in 2013 and 2014.

ACA and Businesses  The Affordable Care Act includes a variety of measures for businesses, specifically for small businesses, that help lower premium cost, growth and increase access to quality, affordable health insurance.  The ACA has an effect on small businesses:  as employers of workers, and  as employees of a small business.

Employer Key Definitions  Employer: includes for-profit, non-profit and government employers.  Common law definition of “employee” and “employer” applies.  Full-Time Employee: is an employee who is employed on average at least 30 hours per week.  Full-Time-Equivalent (FTE) Employee: is a combination of employees, each of whom individually is not a full-time employee because they are not employed on average at least 30 hours per week, but who, in combination, are counted as the equivalent of a full-time employee.  For example, two employees, each of whom works 15 hours per week, are the equivalent of one full-time employee.

ACA and Employers  Under the Affordable Care Act, employers covered by the Fair Labor Standards Act (generally, those firms that have at least one employee and at least $500,000 in annual dollar volume of business), must:  provide notification to their employees about the new Health Insurance Marketplace;  inform employees that they may be eligible for a premium tax credit if they purchase coverage through the Marketplace; and,  advise employees that if they purchase a plan through the Marketplace, they may lose the employer contribution (if any) to any health benefits plan offered by the employer.

ACA and Employers  Employers are required to provide employees with a standard “Summary of Benefits and Coverage” (SBC) form explaining what their plan covers and what it costs.  The purpose of the SBC form is to help employees better understand and evaluate their health insurance options.  Penalties may be imposed for non-compliance.

ACA and Employers  The Affordable Care Act creates new incentives to promote employer wellness programs and encourage employers to take more opportunities to support healthier workplaces.  Under final rules that take effect on January 1, 2014, the maximum reward to employers using a health-contingent wellness program will increase from 20 percent to 30 percent of the cost of health coverage.

ACA and Employees  Beginning January 1, 2014, individuals who are eligible for employer-provided health coverage will not have to wait more than 90 days to begin coverage.  The maximum amount an employee may elect to contribute to health care flexible spending arrangements (FSAs) for any year will be capped at $2500, subject to cost-of-living adjustments. Note: Transition relief means that employer responsibility payments will not be collected for 2014

Small Businesses ( < 50 Employees) Note: Transition relief means that employer responsibility payments will not be collected for 2014

Self-Employed and Sole Proprietors  Self-employed people and sole proprietors are considered “individuals” and are subject to the ACA individual mandate.  Can shop for coverage for individual/family in the Marketplace or privately.  Compare cost of current individual policy (if any) to policies available in their state’s Marketplace.  May have cost savings vs. policies offered in private market

ACA Employer Provisions  Employers must offer adequate health insurance or Qualified Health Plans (QHPs).  Insurance is deemed adequate if it is a 60/40 plan.  That is, no more than 40% of the total health care costs in a year would be expected to be paid by the average person insured in this type of plan.  Many current employer-provided plans are 50/50 or even less.

ACA Employer Provisions  Small employers (< 50 FTE) are not mandated to offer health insurance to full-time employees.  Workers may be mandated to purchase and may likely do so with tax credits in the Marketplaces.  If employers offer insurance, it must be offered equally to everyone.  SHOP (Small Business Health Option Program) Exchange is available for small employers.  If < 25 employees and provide health insurance, 50% tax credit in 2014 (35 % for nonprofit organizations).

Small Business Tax Credit  The Small Business Health Care Tax Credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have.  Small business tax credit requirements:  Coverage must be purchased through the SHOP Marketplace.  The employer must cover at least 50% of the cost for single (not family) coverage for each employee.  The employer must have fewer than 25 full-time equivalent employees.  Employees’ average annual wages can be no more than $50,000.

SHOP Marketplace  Beginning in 2014, small employers may offer insurance through the Small Business Health Option Program (SHOP) Marketplace.  The employer-choice SHOP Marketplace. Eligible employers can select one or more plans; their employees can choose coverage from these options.  The employee-choice SHOP Marketplace. Eligible employees can select from four options: bronze, silver, gold and platinum. Employees can select any plans offered at that level in their state. Delayed until 2015 in the Federally facilitated SHOP.

SHOP Marketplace  A small business owner has to attest that the business:  is located in a SHOP Marketplace’s service area (generally a state).  offers health coverage to all full-time employees (FTE), or those working an average of 30 or more hours per week.  has at least one eligible employee on their payroll.  has less than 50 FTE employees on their payroll in In 2016, employers with up to 100 employees will be able to participate in SHOP.  Have at least 70% of his full-time employees enroll in the SHOP Marketplace plan (may vary by state).

Insurance Affordability for Employees  If self-only plan is deemed unaffordable, employees are eligible for tax credits through the Marketplace.  Insurance is deemed affordable if the annual premium for a self-only plan (not a family plan) costs less than 9.5% of a person’s annual household gross income.

Large Businesses ( > 50 Employees) Note: Transition relief means that employer responsibility payments will not be collected for 2014

ACA “Pay or Play” Rules  Individual Shared Responsibility: “Everyone must have health insurance…..or pay a federal government penalty” (certain exceptions apply).  Employer Shared Responsibility: “Employers must offer their workers adequate and affordable insurance if they have 50 or more employees, including seasonal ones, working 30 hours a week for more than 120 days…..or pay a federal government penalty”. Note: Transition relief means that employer responsibility payments will not be collected for 2014

Determining Employer Shared Responsibility  An employer is subject to Employer Shared Responsibility if it averaged a combination of full-time employees (including seasonal employees) and full-time equivalents that equals at least 50.  Example: Company X has 40 full-time employees working 40 hours per week, along with 20 part-time employees working 15 hours per week. The 20 part-time employees are counted as 10 full-time equivalent employees. Company X has 50 full-time employees and is subject to the employer shared responsibility provisions.  To determine whether it is subject to Employer Shared Responsibility for a given calendar year, the employer looks to the size of its workforce in the prior calendar year.

Employers with > 50 Employees: 2 Potential Penalties DELAYED UNTIL JANUARY 2015  Penalty for not providing health care coverage  $2,000 per year for each full time employee starting at employee #31  Example: 60 employees: 60 – 30 = 30 x $2,000 = $60,000 per year penalty for not providing health coverage  Penalty will increase with rising insurance premiums  Penalty for not providing affordable and adequate health care coverage  If any employee has to pay > 9.5% of income for employer’s coverage AND/OR  If coverage does not pay at least 60% of covered health care expenses  $3,000 per year for each full time employee receiving a tax credit up to maximum of $2,000 per year x number of full time employees starting at employee #31  Penalty will increase with rising insurance premiums

Large Employer Options That Make “Business Sense”  There is little reason to believe that, when the employer mandate fines kick in, that employers won’t do one of two things:  Either not offer insurance at all and pay the smaller fine OR  Make sure that the insurance they offer meets the criteria of being affordable and adequate.

ACA Employer Facts  Department of Health and Human Services: “96% of all businesses will be exempt from the law”  Only 0.2% of U.S. businesses with 50+ employees do not provide health insurance to FT employees  Resources affordable-care-act-could-impact-farmers/ affordable-care-act-could-impact-farmers/ the-affordable-care-act-really-bad-for-business/ the-affordable-care-act-really-bad-for-business/

Action Steps for Small Businesses

Action Steps for Employers  Compare current insurance (especially individual policies) with state Exchanges  Consult with a professional advisor if business is close to 50 FTE employees  Do the math: pay or play?  Develop a plan to optimize mandate requirements within the business model (e.g., more part-time, less full-time, limiting surges of workers to < 120 days)  Obtain a health insurance plan (if business decides to cover employees). Make sure it both:  meets the 60/40 rule  costs less than 9.5% of the least (lowest) paid employee’s annual (household) income

ACA Dates to Remember  Employer mandate enforcement delayed until 2015  All are still subject to ACA individual mandate in 2014  Six-month initial enrollment period for Exchanges: October 1, 2013-March 31, 2014  Subsequent years enrollment dates: October 15 to December 7.  Resources: to-know/ to-know/

More Resources  Healthcare.gov Small Business:  ACA Employer Penalties: aca-tax-penalty.html and aca-tax-penalty.html

Kaiser Family Foundation Video: Health Reform Hits Main Street

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In many cases, you can get preventive services for free:  Cancer screenings such as mammograms and colonoscopies  Vaccinations such as flu, mumps & measles  Blood pressure screening  Cholesterol screening  Tobacco cessation counseling and interventions  Birth control  Depression screening  And more… Visit for a full list More Affordable Health Care Note: Transition relief means that employer responsibility payments will not be collected for 2014

Farm Families and Health Care  Farmers/ranchers are more likely than the U.S. population as a whole to have health insurance Farm work is hazardous; many occupational injuries  Have insurance to “protect the farm”  Many rely on individual policies (36% vs. 5% of all Americans)  Few group options previously  May use a high-deductible policy paired with a HSA  The Marketplaces (Exchanges) will offer new insurance options with likely lower premiums because it will no longer be legal to charge anyone (including farmers) for any pre-existing condition or risks associated with a higher risk occupation (such as farming) Note: Transition relief means that employer responsibility payments will not be collected for 2014

Premium Assistance Tax Credits Note: Transition relief means that employer responsibility payments will not be collected for 2014 Federal Poverty Level % of income premium costs Maximum income for an individual (salary), 2013 FPL Maximum income for an individual (hourly) – [40 hour work week] Approx. maximum annual premium (before tax subsidy) Up to 133% FPL2% of income$15,282$7.35/hr.$ % FPL3 - 4% of income$17,235 $8.28/hr. $ % FPL % of income$22,980$11.04/hr.$1, % FPL % of income $28,725 $13.81/hr. $2, % FPL % of income $34,470$16.57/hr.$3, % FPL9.5% of income$45,960$22.10/hr.$4,366

<138% FPL $32, % FPL $32,499- $94, % FPL or > $94,200 State Expansion? Employer Coverage Adequate and Affordable? YesNo Eligible for Medicaid Eligible for Tax Credit in Marketplace (100%-138% FPL) YesNo Eligible for Tax Credit in Marketplace Not Eligible for Tax Credit FPL = Federal Poverty Level Health Plan Enrollment Eligibility in the Marketplace: Family of 4 Consumers can always choose employer coverage if available, or purchase in the private market. To be eligible for tax credits, though, consumers must purchase through the Marketplace. Note: Transition relief means that employer responsibility payments will not be collected for 2014

Helping Consumers in Marketplace greet consumers assess their knowledge assess their needs identify next steps provide assistance Note: Transition relief means that employer responsibility payments will not be collected for 2014

Helping Consumers in Marketplace greet consumers assess their knowledge assess their needs identify next steps provide assistance When consumers arrive, welcome them, and introduce yourself. Explain that you will: Provide information about the Marketplace and health coverage Assist them with obtaining health coverage through the Marketplace Keep all personal, health, and financial information absolutely confidential Assure consumers that you are: Unaffiliated with any insurance providers, and Neutral and that you will not influence consumers’ health coverage decisions Note: Transition relief means that employer responsibility payments will not be collected for 2014

Helping Consumers in Marketplace greet consumers assess their knowledge assess their needs identify next steps provide assistance In assessing what a consumer knows, there are three areas to explore: 1.Health Coverage 2.Affordable Care Act 3.Marketplace Note: Transition relief means that employer responsibility payments will not be collected for 2014

Helping Consumers in Marketplace greet consumers assess their knowledge assess their needs identify next steps provide assistance Determine if consumers understand: the basics of health insurance (health coverage) insurance companies AND consumers pay for health care insurance companies contract with different networks of doctors, and that their doctor may not be covered by some insurance companies Area 1. What do they know about Health Coverage? Note: Transition relief means that employer responsibility payments will not be collected for 2014

Helping Consumers in Marketplace greet consumers assess their knowledge assess their needs identify next steps provide assistance What are some questions you could ask to see what they know about health coverage? What questions do you have about health insurance? Have you managed your health care costs in the past? Others? Note: Transition relief means that employer responsibility payments will not be collected for 2014

Helping Consumers in Marketplace greet consumers assess their knowledge assess their needs identify next steps provide assistance Determine if consumers: Understand the Affordable Care Act Know the impact of the Affordable Care Act Are aware of the major deadlines Are aware of the consumer protection provisions under the law Area 2. What do they know about the Affordable Care Act? Note: Transition relief means that employer responsibility payments will not be collected for 2014

Helping Consumers in Marketplace greet consumers assess their knowledge assess their needs identify next steps provide assistance What are some questions you could ask to see what they know about the ACA? What have you heard about the new health care law? What questions do you have about the impact of the law on you and your family? Others? What are your questions about the Affordable Care Act? Note: Transition relief means that employer responsibility payments will not be collected for 2014

Helping Consumers in Marketplace greet consumers assess their knowledge assess their needs identify next steps provide assistance Determine if consumers: Understand the Marketplace eligibility and enrollment process Understand their eligibility requirements for health coverage, tax credits and cost savings Are aware of the different health coverage options Are aware of the available programs to lower costs of health coverage. Area 3. What do they know about the Marketplace? Note: Transition relief means that employer responsibility payments will not be collected for 2014

Helping Consumers in Marketplace greet consumers assess their knowledge assess their needs identify next steps provide assistance What are some questions you could ask to see what they know about the Marketplace? What is important to you when it comes to health coverage? What factors are important to you when choosing a health plan? Others? What are your concerns about paying for coverage? Note: Transition relief means that employer responsibility payments will not be collected for 2014

Helping Consumers in Marketplace greet consumers assess their knowledge assess their needs identify next steps provide assistance Ask questions to determine: if the consumer currently has health coverage who needs health coverage (e.g., the consumer, the consumer's children or spouse, the consumer's employees) what features are most important to the consumer (e.g., affordable prices, certain coverage, or whether certain doctors are included in the plan) if the consumer has started the eligibility application process If the consumer needs additional information about the health care law, health coverage, or the Marketplace Note: Transition relief means that employer responsibility payments will not be collected for 2014

Helping Consumers in Marketplace greet consumers assess their knowledge assess their needs identify next steps provide assistance Have consumers set up an account and/or started the applications process? Are consumers unfamiliar with the health care law? Others? Do consumers know their health insurance options? Note: Transition relief means that employer responsibility payments will not be collected for 2014

Helping Consumers in Marketplace greet consumers assess their knowledge assess their needs identify next steps provide assistance You will provide assistance with: educating consumers about the eligibility and enrollment process setting up accounts comparing QHPs selecting QHPs completing applications filing for exemptions filing appeals Note: Transition relief means that employer responsibility payments will not be collected for 2014